Short-term challenges to the energy transition are delaying a surge in renewable energy investment in 2023.

In the latest edition of The Green Bond Report from SEB, shows that there are initial signs that the market is now recovering as green bonds and sustainability-linked bonds are outperforming last year’s issuance levels following the energy uncertainty caused by the invasion of the Ukraine.

“While all of this suggests that the transition to a zero-emission economy will be held up in 2022, we still expect a major acceleration in transition investment to kick off in 2023. The emphasis will be on renewable energy, which is the cheapest alternative,” states Thomas Thygesen, head of research, climate and Sustainable Finance, at SEB.

This acceleration is expected to occur despite the pushback to ESG investing, examples of which are to be found in Florida where state pension funds have been banned from screening for ESG risks and Texas attempting to marginalise funds opposed to the fossil-fuel industry.

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